Business News Roundup, Feb. 25

Published 4:53 pm, Tuesday, February 24, 2015

The 2014 Buick models are displayed at the New York Auto Show in 2013. The General Motors brand cracked the Consumer Reports top 10.

The 2014 Buick models are displayed at the New York Auto Show in 2013. The General Motors brand cracked the Consumer Reports top 10.

Photo: Richard Drew / Associated Press

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People use a self-service kiosk at a JPMorgan Chase branch in New York. The bank is closing branches.

People use a self-service kiosk at a JPMorgan Chase branch in New York. The bank is closing branches.

Photo: Mary Altaffer / Associated Press

Business News Roundup, Feb. 25

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Earnings

HP misses

expectations

Shares in Hewlett-Packard Co. slid in late trading Tuesday after the company reported quarterly revenue and an earnings outlook that were below Wall Street estimates.

The Palo Alto tech giant reported fiscal first-quarter profit of $1.37 billion (73 cents per share), down 4 percent from a year earlier. Earnings amounted to 92 cents per share after adjusting for one-time items. That surpassed the 92 cents that analysts had expected.

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For the quarter ending in April, HP expects earnings of 84 to 88 cents per share. Analysts were expecting 96 cents per share. HP said a strong U.S. dollar will hurt overseas sales.

For the year, HP predicts profit of $3.53 to $3.73 per share.

HP has struggled with broad industry shifts, including the increasing popularity of mobile devices and software delivered over the Internet. CEO Meg Whitman is leading the turnaround effort and has announced plans to split the company. One arm will focus on selling personal computers and printers. The other will concentrate on commercial technology, including hardware and software for big data centers.

Shares dropped $2.44, or 6.3 percent, to $36.05 in after-hours trading. The stock closed up 30 cents to $38.59 in regular trading, reflecting a climb of 29 percent in the last 12 months.

Buick is the first U.S. automotive brand to crack the top 10 in Consumer Reports magazine’s annual report cards.

U.S. automakers also placed three vehicles on the magazine’s list of top picks, the first time that’s happened in 17 years. The rankings were unveiled Tuesday in the magazine’s annual auto issue.

Buick, made by General Motors, placed seventh in the brand rankings. But both lists continue to be dominated by Japanese and German manufacturers, with Lexus, Mazda, Toyota, Audi and Subaru taking the top five brand spots.

In the model rankings, the top overall finisher was Tesla’s Model S electric car, for the second year in a row. The Model S, which cost the magazine $89,650, finished first due to its performance and technical innovations, the magazine said. Buick’s Regal midsize car beat the BMW 328i as the top sports sedan, and the Chevrolet Impala was named the top large car.

The magazine calculates each brand’s overall score with a composite of its vehicles’ road-test scores and reliability scores for each model in its annual survey of subscribers. It’s the third year for the brand rankings.

Porsche placed just ahead of Buick at No. 6, while Honda, Kia and BMW rounded out the top 10 brands. Mercedes-Benz, Acura and Infiniti all suffered precipitous declines in their rankings due to unreliable new models or poor road test scores.

Other top models included the Subaru Impreza in the compact car category, Subaru Legacy in midsize cars, Toyota Prius as the best green car, Audi A6 luxury car, Subaru Forester small SUV, Toyota Highlander midsize SUV and the Honda Odyssey minivan.

Japanese vehicles won six of 10 top pick categories, but that was the smallest number in the 19-year history of Consumer Reports top picks.

Banking

Chase to close

300 branches

JPMorgan Chase plans to close 300 bank branches over the next two years, about 5 percent of the total, as more customers move online and the bank seeks to cut costs.

The closures are part of a $1.4 billion cost-cutting plan the bank announced for this year. The latest developments were revealed during the bank’s annual investor day conference Tuesday.

Online and mobile banking have become increasingly popular and that trend is expected to continue. The shift online has begun to make brick-and-mortar branches staffed full of tellers less necessary.

Tellers handled only 42 percent of all bank deposits last year, according to JPMorgan, down from 90 percent in 2007. Along with ATM deposits, banks have introduced technology that allows customers to just take a picture of a check with a smartphone to make a deposit.

Teller transactions are among the most expensive for banks to process. It costs JPMorgan roughly 65 cents each time a deposit is made through a teller, more than eight times the cost to process an ATM deposit. Deposits through a smartphone cost the bank 3 cents, a fraction of the cost of a traditional teller deposit.

Roughly 90 percent of JPMorgan customers visit a branch each year. The bank had been opening branches as recently as 2013.

Cybercrime

Reward offered

in hack probe

The FBI is offering a $3 million reward for information leading to the arrest of a Russian hacker charged with creating a computer virus used to steal more than $100 million.

The Justice Department last year accused Evgeniy Mikhailovich Bogachev of being the mastermind behind a hacking campaign known as Gameover Zeus, which infected hundreds of thousands of computers worldwide. Bogachev remains at large and faces charges including conspiracy, money laundering, bank fraud and wire fraud.

“Our goals are simple: to use every method available to the FBI and the United States intelligence community to combat these attacks,” Robert Anderson, the FBI’s executive assistant director for cybersecurity, said Tuesday.

Bogachev is accused of acting as ringleader for a hacking operation that installed malicious software on victims’ computers to capture bank account numbers, passwords and other sensitive information.

The reward is the biggest ever offered by the agency.

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